Labor and Unemployment Trends Impacting the Swine Industry
Labor availability and rising costs continue to be major concerns across the agricultural sector — and pork production is no exception. Understanding national labor trends, especially unemployment rates, is essential for producers, processors and ag lenders alike. These indicators influence not only the supply of workers needed to raise and process hogs but also financial factors like interest rates and cost of capital.
As an agricultural economist at Compeer Financial, I regularly monitor the economic data that impacts our clients and the broader ag industry. In this article, I’ll examine recent unemployment trends, how they connect to Federal Reserve policy decisions and what that means for labor in the swine industry. I’ll also highlight an example of how agricultural education can play a role in addressing labor shortages for the future.
How the Federal Reserve Impacts Labor and Capital Costs
Part of my role as an economist involves closely monitoring macroeconomic indicators that influence the cost of capital and interest rates. This means regularly examining unemployment and inflation rates as well as analyzing how our nation’s central bank responds to these data points.
The Federal Reserve has a dual mandate to:
- Achieve maximum employment through stable unemployment rates
- Maintain price stability via low inflation
The Federal Open Market Committee (FOMC) typically meets eight times a year for “careful, objective and non-political analysis” of unemployment and inflation data to determine three monetary policies:
1. Open Market Operations
Adjusting the money supply and influencing interest rates through the buying or selling of government securities.
2. Federal Funds Target Rate
Setting the target rate for overnight interbank lending, which indirectly affects market interest rates and consumer sentiment.
3. Reserve Requirements
Determining the minimum reserves banks must hold, which influences their lending capacity.
Additionally, the Fed sets a specific discount rate, which charges banks for short-term loans. While the FOMC primarily focuses on the Fed Funds rate, changes to the discount rate can also be discussed during meetings. The Board of Governors can adjust the discount rate outside regular meetings, especially in response to economic shifts or financial emergencies.
A Closer Look at the Current Unemployment Rate
With that economic backdrop in mind, let’s take a closer look at current unemployment rates.
In May, the U.S. non-farm unemployment rate remained steady at 4.2%, comfortably within the 4.0–4.5% range considered healthy by labor economists. Despite economic uncertainties in early to mid-2025, the rate has remained steady at 4.2% for three consecutive months.
In the very near term, this stable rate is unlikely to prompt changes in the Fed Funds target rate, which indirectly affects interest rates. Funds rate changes would likely require prolonged higher unemployment (or lower inflation). However, the rise in continuing jobless claims indicates potential underlying challenges, as finding new employment may become difficult for those already unemployed.
Implications for Swine Producers and Agricultural Labor
It's important to note that this rate reflects "non-farm" unemployment. While non-farm employees in agriculture are included in this rate, farm labor — including self-employed, hired and unpaid workers — is separately tracked.
A relationship exists between these labor data sets: very low nonfarm unemployment rates can make finding hog farm employees more challenging. As an industry, we’ve certainly seen this dynamic, particularly during the very low (3.9% and less) nonfarm national unemployment rate period from December 2021 to April 2024.
While the rate has remained above 4% since May 2024, the pork industry continues to face labor shortages.
Looking Ahead: Investing in the Next Generation of Agricultural Labor
Solving these labor challenges requires much more than adjustments to the FOMC's Fed Funds rate or any other single policy decision.
While not strictly economic — nor an idea that will singlehandedly impact farm labor supply — let’s conclude with a small example of inspiring the next generation of pork industry laborers.
Compeer's Commitment to Agricultural Education
From college scholarships to support for 4-H and FFA, Compeer offers various programs to inspire and empower youth in agriculture to succeed and inspire their future careers.
One example directly tied to hogs is Ogilvie High School’s 2025 agricultural education grant from Compeer’s Fund for Rural America to purchase:
- A swine breeder artificial insemination simulator
- Ear tagger
- Tags
If a student doesn’t experience the opportunities of the hog industry, they’ll never know it’s an option. From macroeconomics to micro-experiences, it’s all hands-on deck to meet the labor needs of our industry.
Connect with a Swine Industry Expert
Meeting today’s labor challenges and preparing for tomorrow’s requires both insight and action. At Compeer Financial, our team is committed to helping pork producers navigate economic trends and build long-term strategies for success.
Connect with Compeer’s team of swine industry experts and agricultural economist Megan Roberts to explore personalized risk management and workforce solutions tailored to your operation.